NBN backhaul costs hit little telcos: ispONE

Summary:CEO of wholesale broadband provider ispONE, Zac Swindells, believes the government needs to address the lack of competitive backhaul in regional Australia in order to woo smaller internet service providers (ISPs) to offer services in those areas.

CEO of wholesale broadband provider ispONE, Zac Swindells, believes the government needs to address the lack of competitive backhaul in regional Australia in order to woo smaller internet service providers (ISPs) to offer services in those areas.

The wholesale aggregator, which provides wholesale internet services to ISPs such as TransACT and Southern Phone, announced it had completed the on-boarding process and had become a certified provider for the NBN.

Swindells told ZDNet Australia that as the company looked to set up services in the first five mainland release sites, it had encountered high costs for getting backhaul from the point of interconnect (POI) to ispONE's point of presence.

"It hasn't been a very good process for ordering the backhaul," he said. "We're dealing with a carrier with one fibre operator out there, which is a very cumbersome process."

The government has invested $250 million to address backhaul blackspot issues in regional and remote Australia; however, this roll-out did not appear to address the areas Swindells was concerned about.

Swindells said that the backhaul problem would have been avoided had the government stuck with its original plan of 14 POIs, instead of agreeing to implement the Australian Competition and Consumer Commission's decision to expand this to 121 POI. With so many POIs, the government would need to buy capacity from backhaul providers to then offer on to retail service providers to solve the problem, he said.

Swindells said that given the volume of customers ispONE services, he doesn't expect the recent price freeze for capacity costs to impact it, as its number of customers per POI will be above the cut-off mark under which providers are offered a discount.

Although Swindells would not reveal the wholesale prices he plans to offer to his ISPs, he said they would be able to offer competitive prices based on the prices Internode and others had already published.

"Wholesale pricing will be released in the next two days. All of our ISPs will be receiving that," he said. "We've designed in such a way that they can make some sort of income."

Swindells said that the company will offer services at all five first release sites, as well as the newer greenfields sites as they come online. Jumping onto the NBN was more about offering all the options to ispONE's customers, Swindells said, adding that uncertainty about whether the network will even be completed remained high.

"It is still up in the air, if 121 POIs will be built. I think more than anything else there will be a change of government before that. What we look forward to is some stable government and policies so we know where we're actually going to be in 2020."

Topics: NBN, Broadband

About

Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

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